August 21, 2018 | NewsletterARIZONA – “...Property was actually transferred between two very sophisticated players in an arms-length exchange. The valuation approach used by both the buyer and seller in that transaction was, in fact, the income approach. The Court puts a great deal of weight on the fact that, outside the ethereal, hypothetical world of lawyers and experts in courtrooms and in academia debating appropriate valuation methods, outside the vacuum of learned treatises commenting on accepted practices, and with hundreds of millions of dollars at stake, two very sophisticated real-world actors both used the income approach to determine the subject’s value.”

CALIFORNIA – Proper appraisal unit to be used under California Property Tax Code when comparing base year value to current full cash value of property improved with active solar energy generating systems containing non-solar backup systems was property with entire unit, rather than property with backup system alone.

ARIZONA – Unless the substance of a State Board of Equalization decision on an assessment appeal is materially affected, a re-issued decision correcting mere clerical errors does not trigger the start of a new appeal period.

ARKANSAS – Under the statute governing determination of fair market value for utilities and carriers in assessment of property taxes, the Public Service Commission’s Tax Division may, but need not, consider physical or economic obsolescence in valuing a company.

NEW MEXICO – Cable Television provider determined to comprise part of a “communications system” subject to central assessment under New Mexico Tax Code.

MISSOURI – Reproduction cost approach, using original cost less depreciation, is to be employed for calculating assessed value of both personal and real property belonging to natural gas companies.

CALIFORNIA – Airlines’ failure to challenge assessments on their commercial aircraft before local boards of equalization precluded claims that assessments were void because Counties had deviated from mandatory statutory formula.

MINNESOTA – Supreme Court rejects Tax Court’s use of Eurofresh standard, holding that to prove a property suffers from external obsolescence; utility taxpayers need not identify the specific causes of external obsolescence and precisely calculate the contribution of each asset to decreased revenues or profit margins.

SOUTH CAROLINA – Fourth Circuit Court of Appeals holds that South Carolina statute which singles out railroad property by excluding it from 15 percent assessment increase cap afforded other commercial and industrial property violates Railroad Revitalization and Regulatory Reform Act.

TEXAS – Court of Appeals rejects Appraisal District claim that changing or modifying the specific grounds for property tax appeal deprives District Court of jurisdiction.

TEXAS – Oil refinery not required to compare entire value of its refinery to entire value of other refineries in its unequal appraisal analysis, but rather may limit its property tax challenge to certain tax accounts and the portions of its refinery to which they correspond.

GEORGIA – Supreme Court agrees with State Revenue Commissioner that transporter of liquid natural gas is not a gas company and therefore not a public utility.

ARIZONA – Court of Appeals holds that the owner of power plant on tribal land may raise argument that federal law preempts state and local taxation despite prior ruling that plant was subject to state taxation because it was owned privately rather than by the tribe.

OREGON – Cities’ interest in electrical transmission capacity, purchased from electrical cooperative and used to transmit electricity over region’s federally administered power grid, is subject to property tax by Department of Revenue as a property interest held by a taxpayer.

CONNECTICUT – Discounted cash flow method may be used in valuation of trash-to-energy plant.

OREGON – Supreme Court affirms Tax Court decision that non-core buildings constitute functional depreciation detracting from property’s real market value, and that when accounting for this depreciation under the cost approach, the “value of the loss”—the appropriate reduction in replacement value—must be determined with reference to the property’s highest and best use.

VIRGINIA – Supreme Court holds City of Richmond could not impose tax on natural gas consumed solely for purpose of generating electricity.

SOUTH CAROLINA – U.S. District Court rejects railroad’s claim that South Carolina Valuation Act, which limits increases in appraised values of certain industrial properties but not railroads and utility providers, violates the Railroad Revitalization and Regulatory Reform Act of 1976.

NORTH DAKOTA – County auditor may not use omitted property statutes to revalue oil and liquid petroleum gas terminals following reduction in prior year due to failure to notify taxpayer of Board of Equalization meeting.

COLORADO – Court of Appeals holds that counties may retroactively assess oil and gas leaseholds under the omitted property statutes where value has been underreported, even without evidence of omitted property or willfully false and misleading annual statements.

ALASKA – Department of Revenue regulation directing appeals of oil and gas property tax valuation to be heard by State Assessment Review Board while appeals of oil and gas property taxability were to be heard by Department violates statute granting Review Board exclusive jurisdiction over all appeals from Department’s assessments of oil and gas property.

MARYLAND – Tax Court rejects coal-fired electrical generating plant’s claim that highest and best use of its property is a natural gas plant.

NEW YORK – Appellate Division holds that Town may be third-party beneficiary of a provision limiting the generator’s right to appeal property tax assessments in a supply agreement between an energy generating company and a power authority.

UNITED STATES DISTRICT COURT – District Court for the District of Rhode Island holds that challenge to state statute limiting interest awards to power company prevailing in tax appeal is not ripe for review.

OHIO – Supreme Court holds that Board of Tax Appeals lacks the authority to consider whether the county auditor has issued property tax assessment frivolously and in bad faith, such as to warrant sanctions.

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TEXAS – Natural gas production and processing equipment is taxable by a county if located in the county on January 1 for more than a temporary period, even if county is not the equipment owner’s principal place of business.

HAWAII – Intermediate Court of Appeals holds that wind turbines are not taxable real property under Maui County Code.

VERMONT – Supreme Court holds that value of utility easements and rights of way not taxable to easement holder.

GEORGIA – Supreme Court allows Southern LNG to seek declaratory judgment compelling State Revenue Commissioner to recognize it as a “public utility” and to accept its property tax returns rather than requiring filing with the County.

NEW HAMPSHIRE – Department of Revenue Administration could use utility tax appraisal of renewable energy windpark in determining the equalized value for property tax purposes.

NEBRASKA – Payment in lieu of tax exempted public power and irrigation district from liability for property taxes on leased parcels, regardless of whether the parcels were used for an authorized public purpose.